Aston Martin’s way of working, electric vehicle supply shortages, the advent of seamless door-to-door mobility and self-driving partnerships … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 5th February to 11th February 2018.A PDF version can be found here.
Favourite stories of the past week…?

This Is How We Do It — Aston Martin CEO Andy Palmer gave an interesting interview the other day. Aside from some details about the company’s strategy, there is an idiot’s guide to product planning and segmentation that should be required reading at well-funded start-ups. He also gives a view on why there are a dearth of carmakers in the 15,000 – 150,000 annual volume category.

Unions said that the company plans to cut production at the Mirafiori plant, where the Maserait Levante is produced, by an equivalent of 60% in the first six months. There were also several down days at the end of last year. (Reuters)

Standard & Poors upgrades its rating for FCA to BB+ and maintained a positive outlook. (FCA)

Long-rumoured talks for Hyundai to join BMW’s self-driving alliance are reportedly in the final stages. Memo: Hyundai recently announced a collaboration with Aurora on driverless cars. (Handelsblatt)

Announced a goal of 10,000 hydrogen filled vehicles sold by 2022. (Yonhap)

Mazda

Reported Q4 2017 financial results; revenue of 2.5 trillion yen was up 8.5% on a year earlier, operating income of 107 billion yen was 5.1% up. (Mazda)

Nissan (includes Mitsubishi)

Nissan reported financial results for Q4 2018, revenue of 2,943 billion yen was down (2.2)% on a year-over-year basis, profit of 163.5 billion yen was down (15.1)%. Nissan held its forecast FY revenue but reduced the profit outlook by (12.4)%. (Nissan)

Mitsubishi reported financial results for Q4 2017, revenue of 1.5 trillion yen was up 13.1% on a year-over-year basis. Operating profit of 64 billion yen was a marked improvement from a (23) billion yen loss in 2016 Q4. (Mitsubishi)

Announced a new investment plan for its Chinese JV. The aim is to increase volumes from 1.52 million in 2017 to 2.6 million by 2022. The DFL Triple On plan will see new models launched, including 20 electrified models (not all BEVs) — by 2022 the JV expects these models to make up 30% of sales. (Nissan)

Published a research report that said 37% of ASEAN customers planning to buy a car are open to an EV. (Nissan)

Reported Q4 2017 financial results, revenue and profits continued to grow strongly but the company maintained its full year guidance (now looking conservative), citing concerns over exchange rate volatility. (Suzuki)

Reported financial results for full year 2017, losing almost $(2) billion on automotive revenues of $8.5 billion. Tesla said that Model S and X were now constrained by supply of the 18650 form factor cell that they use — a new excuse and slightly odd given Tesla’s past projections of 150,000+ deliveries for the two models combined. Production problems don’t seem to be putting customers off though — deposits shot up 24% to $854 million, but that could all be reservations for Founders Series Roadster (worth $250 million if they were all taken, which they aren’t yet). (Tesla)

Said that it a high profile coast-to-coast autonomous vehicle demonstration is delayed because it is waiting to use coding that could be used in many locations rather; than “game it” with specialised software. (TechCrunch)

Elon Musk wouldn’t give firm answers on current Model 3 status, preferring to lay a big portion of the blame on 3rd parties suppliers of manufacturing facilities. Keen Tesla watchers will remember that Tesla cut out some parts of the normal prototype build phase to save time, that wasn’t mentioned as a potential cause. (Seeking Alpha)

The head of sales and service is leaving the company (to go to Lyft) and will not be replaced; his responsibilities will be absorbed by the CEO. (Seeking Alpha)

Elon Musk said annual production of 100,000 trucks is a “reasonable” target and reiterated that he believes camera, lidar and ultrasonic sensors will be a sufficient sensor set for autonomous driving. He was particularly critical of 400nm to 700nm lidar — slightly odd because it is not the area of focus for many suppliers who are instead working between 900nm – 1500nm. (Seeking Alpha)

Implication: Our analysis indicates that Mr Musk is missing the point — radar is the only sensor set Tesla will be fitting with a range beyond 100m, simply for purposes of redundancy we think additional sensor types will be required, regardless of how intelligent the neural net Tesla develops becomes (and it needs to be very clever indeed to do object recognition from contemporary radar sensors).

Reported Q4 2018 financial results, revenue and profits continued to grow strongly, in part due to a weakened yen. The company revised its financial forecasts up, whilst keeping sales outlook flat, as a result. (Toyota)

Toyota will make an investment in cab company JapanTaxi and the two will work together on development of mobility services. (Toyota)

German prosecutors investigating manipulation of diesel emissions carried out new raids on Audi. (Handelsblatt)

Porsche said it would invest €6 billion in electrified vehicles by 2022, an increase of €3 billion from the prior plan. €500 million of this will be for additional variants of the MissionE (2-3 new top hats by our maths); €700 million is to be spent on non-vehicle projects such as infrastructure. (Porsche)

Implication: if Porsche needs to spend €6 billion / $7.3 billion on electrification by 2022, maybe Ford ($11 billion by 2022) needs to take a second look at its plans.

Porsche and Audi executives said that the two firms would save around 30% investment by sharing an EV platform, in development for launch around 2025. (Engadget)

Scania and Chinese truckmaker Haylion agreed a collaboration to work on autonomous trucks. (Scania)

Aston Martin’s CEO said the company will “never make more than 7,000 sports cars a year”; SUVs are incremental to this — the company hopes for sales of between 5,000 – 7,000 per year from its forthcoming model. (Automobile)

McLaren’s CEO said that all future models, starting with the Sports Series replacement in 2019, will only be offered with hybrid engines (except possibly for some trackday specials). (Autocar)

UK hydrogen powered vehicle start-up RiverSimple launched a new crowdfunding round; aiming to create a test fleet driven by members of the public. (Riversimple)

News about other companies and trends

Economic / Political News

There were 269,429 passenger car registrations in Germany during January, an 11.6% year-over-year increase. (KBA)

UK passenger car registrations for January of 163,315 fell (6.3)% on a year earlier. The biggest declines were seen in business purchases, which fell (1.8)%. (SMMT)

Suppliers

Continental and Nvidia agreed a partnership for self-driving car technology, intending to integrate Continental’s sensor technology with Nvidia’s chips. The partners hope to be able to offer a Level 3 product in 2021. (Continental)

Implication: a near-term timeline for offering a level 3 system somewhat undermines the insistence of multiple companies around developing their own bespoke solution. The partnership also highlights the increasing complexity of relationships: Continental is one of the integration partners for BMW / Intel and Nvidia is the chosen component supplier for VW.

Dealers

US vehicle auctions technology provider KAR acquired fleet management start-up Stratim, saying that the two firms shared many of the same customers. (Auto Rental)

Didi announced a deal with 12 carmakers — including the Renault-Nissan-Mitsubishi alliance; KIA and a series of Chinese manufacturers — to work on a future electric car sharing network. (Deal Street Asia)

Europcar said it would start offering integrated taxi rides to and from the rental location into leasing offers; using the Brunel ride hailing service it acquired last year. (Auto Rental International)

com — the recent acquirers of Uber’s leasing business — completed a new round of fund raising. At the same time, Fair purchased Skurt, a fleet management company BMW had previously invested in. (FINSMES)

Business expense company Certify said that 68% of US travel spending on its systems in 2017 was on ride hailing services, against 7% for taxi rides. (Auto Rental)

Zoomcar said that its revenue had grown 40% on a year-over-year basis and that it was launching a bike sharing scheme called PEDL (Auto Rental)

Driverless / Autonomy (history)

Byton announced a partnership with Aurora to develop level 4 and 5 self-driving vehicles. (Byton)

Uber and Waymo settled their ongoing case over stolen IP after a few days in court. The $245 million settlement will be paid in Uber stock at a $72 billion valuation. Google emails released during the trial confirmed that the company had tried to agree a tie-up with Ford (long rumoured but previously denied by both companies). (Futurism)

Continental and Nvidia agreed a partnership for self-driving car technology, intending to integrate Continental’s sensor technology with Nvidia’s chips. The partners hope to be able to offer a Level 3 product in 2021. (Continental)

Autonomous truck company Embark said it had completed a 2,400 mile journey from California to Florida to test its systems (with safety drivers). There were numerous disengagements but the company was encouraged that often the intervals were several hours at a time (not unexpected from highway driving if the system is competent). (Engadget)

Uber’s CEO said that because some routes are “tricky” for autonomous vehicles, Uber expects to see “a mix of human-driven vehicles along self-driving ones for years to come”. The company also thinks that self-driving cars “must” be shared, rather than individually owned. (Uber)

Scania and Chinese truckmaker Haylion agreed a collaboration to work on autonomous trucks. (Scania)

Long-rumoured talks for Hyundai to join BMW’s self-driving alliance are reportedly in the final stages. Memo: Hyundai recently announced a collaboration with Aurora on driverless cars. (Handelsblatt)

Mercedes-Benz’s VP of strategy said putting self-driving systems in a vehicle with an internal combustion engine “doesn’t make sense” because of the negative impact on fuel economy. (Wired)